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May 24, 2018

A Brexit high noon?

We noted a comment by Faisal Islam (@faislaislam), political editor of Sky News, who tweeted about a potentially important change in the British government’s Brexit strategy. He writes that the government would announce today it is bringing forward all the Brexit-related legislation to June. This includes the 15 amendments on which the government lost in the House of Lords. Recent expectations had been to delay the legislative process until the last moment. 

Islam writes that the purpose is for the government to face down the Tory rebels who support the customs union. The rebels remain confident that they will win. One of the political moments of truth in the Brexit process is approaching. 

He notes that some of the rebels believe that this is a threat to call snap elections, not a prospect Tory MPs would relish right now. We are not in a position to assess whether this is a tactically smart move by Theresa May. We are less sure than some Tory MPs that a pro-customs union vote would necessary trigger elections. As this would affect only the political declaration attached to the withdrawal agreement, we think that the temptation for a fudge remains on the table. 

Alex Barker writes in the FT that the reality is dawning that the full extraction of the UK from the EU will not be complete until the mid-2020s. He said the necessity of an EU afterlife is accepted, in principle, by both sides at the Brexit negotiation table. There are big differences about what form it should take, though.

One option would be to make the transition agreement renewable. We doubt the EU will agree to that. The emerging consensus is for a time-limited customs union, which as we noted before constitute the best option for a political compromise, both within the UK and between the EU and the UK. 

The article contains an interesting snippet of information - that May got irritated by Leo Varadkar when he probed her on the precise conditions to bring the Irish border backstop to an eventual end. A time-limited customs union does not really solve the problem, it just postpones the moment when it needs to be solved.

Our general observation is that, if kicking the can down the road solves a current dilemma, the EU will always choose that. This is why the eurozone crisis never really ended.

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May 24, 2018

Selmayrgate and Galileo

Here is an interesting twist in the saga of British participation in the Galileo satellite navigation system post-Brexit. The story so far was that the EU was planning not only to exclude UK-based firms from tenders for development of the technology, but also to prevent the UK from accessing the secured layer of Galileo for government and military use. Now, the story in The Times is that a number of important member states - France, Spain, the Netherlands, Sweden and the Baltic states - are objecting to what they see as a specifically German attempt to shut out the UK from security cooperation. The Times seems to have jumped on the story when France joined the other member states in opposing the German position. They attribute this to Martin Selmayr, the highest-ranking EU civil servant and former chief of staff to Jean-Claude Juncker, and his entourage. Selmayr is accused of breaching diplomatic norms. After the controversial manner of his appointment, this is not the best start for Selmayr's tenure as secretary-general of the Commission. 

The most shocking bit of the story is the irritation of EU diplomats, who complain that a letter from Britain sent to the Commission asking for clarification and talks about Galileo went unanswered for two months. This has increased the sympathy for Britain among diplomats from other member states, who want Britain to be treated properly as the full member state that it still is. Selmayr wrote back to the British ambassador to the EU in April, effectively to end Britain's participation in Galileo. But it appears Selmayr is being criticised for doing so without going through the proper consultations, and for even telling Michel Barnier, chief brexit negotiator for the EU, that he could not discuss the contents of the letter with the ambassadors from other member states.

But Selmayr has the support of Germany on this issue, also on a personal level as he's said to be close to Peter Altmaier, Germany's economy minister and former chief of staff to Angela Merkel. Other member states more focused on security cooperation than Germany don't like it being sacrificed to make an example of the UK, but Germany is said to be taken with the idea of turning Brexit into a cautionary tale.

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May 24, 2018

Greek election strategies

The Greek parliamentary opposition parties intensified their calls for snap elections yesterday, accusing Alexis Tsipras of incompetence to handle the review, the programme exit or the Macedonian name dispute. This is nothing but a dress rehearsal, writes Kathimerini. Tsipras has no interest to give in to any early election calls at this point in time, the polls suggest that Syriza is still trailing behind New Democracy by up to 20pp. There are only 15 months to go to the next elections anyway. What this is really about is who gets credited and who gets blamed. Tspiras strategy is to deliver the bailout programme exit and an end to the Macedonian name dispute so that the story line ahead of the elections would be: I pulled you out of bailouts, and I settled the Macedonia question. It would win him kudos in the international diplomacy scene. 

Some observers say Tspiras' interest is motivated by the possibility that it could divide New Democracy. Back in the 1990s a split between moderates and hardliners in the Macedonia name dispute toppled the government of Constantinos Mitsotakis, the father of the current leader Kyriakos Mitsotakis, and those divisions are still active in the party. More people came to the streets to demonstrate against the use of Macedonia than people demonstrated against the austerity programmes, according to a comment from Renne Maltezou on Reuters.

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